The death toll from a building collapse in Bangladesh's capital Dhaka has risen to more than 100 with officials fearing many more are trapped beneath the debris.

Rescue workers searched through the night for survivors trapped in the rubble when the eight-storey building collapsed.

Only the ground floor of the Rana Plaza in the town of Savar outside Dhaka - which housed a number of businesses including a garment factory - remained intact when the block imploded about 9am (local time) on Wednesday.

Firemen estimate as many as 2000 people could have been inside at the time it came down.

Hundreds of people managed to escape, but already the bodies of dozens of people who did not get out have been recovered.

Working under floodlights and armed with concrete cutters and cranes, hundreds of fire service and army rescue workers struggled to find survivors in the mountain of concrete and mangled steel which resembled the aftermath of an earthquake.

Corpses and the injured were evacuated from the higher reaches of the pile of flattened floors with makeshift slides made from cloth, which just hours earlier was being cut into shirts and trousers for export to Western markets.

Deputy police chief of Dhaka district A B M Masud Hossain, who is in charge of identifying bodies and returning them to their relatives, said that 127 people had died "most of them women".

Hiralal Roy, a senior emergency ward doctor at the nearby Enam hospital where victims are being taken, earlier said at least 700 injured people had been treated at the hospital.

"The toll will rise as conditions of some injured were critical," he said.

The managers forced us to rejoin and just one hour after we entered the factory the building collapsed with a huge noise

Factory worker Mousumi

Some workers complained the building had developed cracks on Tuesday evening, triggering an evacuation, but they had been forced back to the production lines by their managers.

"The managers forced us to rejoin and just one hour after we entered the factory the building collapsed with a huge noise," said a 24-year-old worker who gave her first name as Mousumi.

"I am injured, but I've not found my husband who was working on the fourth floor," she added, estimating that 5,000 people worked inside the building, which also housed apartments, a bank and shops.

Sohra Begum, a worker at one of the garment factories, said: "I was at work on the third floor and then suddenly I heard a deafening sound but couldn't understand what was happening.

"I ran and was hit by something on my head."

Home minister Muhiuddin Khan told reporters the building was illegal and violated the country's building code.

Prime minister Sheikh Hasina has announced a national day of mourning for Thursday when flags will fly half-mast in memory of the victims.

'Failure'

The huge death toll was likely to raise further questions about safety in the garment industry.

Bangladesh has the second-biggest clothing industry in the world, supplying to major Western brands, but it is plagued by regular accidents and demonstrations from workers demanding better wages and working conditions.

In November a fire at the Tazreen Fashion factory on the outskirts of Dhaka killed 112 people.

Edward Hertzman, a textiles broker based in New York, whose clients include clothing manufacturers and retailers like PacSun, Oxford Industries and Fisham-Tobin, said pressure from US retailers to keep a lid on costs continues to foster unsafe conditions.

Following the Tazreen fire, giant US retailer Wal-Mart Stores Inc said it would take measures to alleviate safety concerns, while Gap Inc announced a four-step fire-safety program.

"It is going to take much more than retailers issuing press releases or paying compensation to victims," Mr Hertzman said.

"They're going to have to stop beating up the factories and start paying higher prices.

"That will allow the factories to raise wages and standards."

Wal-Mart said it still could not determine whether a factory in the building that collapsed was producing goods for the company.

Both Spanish fashion label Mango and Benetton of Italy, previously linked to the factory, denied having suppliers there.

Tessel Pauli, a spokeswoman for the Amsterdam-based Clean Clothes Campaign, said the accident was "symptomatic" of problems in Bangladesh where foreign buyers often overlook safety problems in their hunt for higher profits.

"These accidents represent a failure of these brands to make safety a priority," she said.

"They know what needs to be done and they are not doing it."

Building collapses are common in Bangladesh as developers often flout the official construction code when erecting multi-storey structures.

More than 70 people were killed after a multi-storey garment factory collapsed in the Savar area in 2005.

Also in November last year at least 13 people were killed after an under-construction flyover fell down in the port city of Chittagong.